2. Efficiency in the presence of externalities Public wifi hotspots grant many external benefits on society: more equitable access to the internet, increased educational opportunities, and so on. Therefore, the market equilibrium quantity of public wifi hotspots does not equal the socially optimal quantity. The following graph plots the demand for public wifi hotspots (their private value), the supply of public wifi hotspots (the private cost of producing them), and the social value of public wifi hotspots, including both the private value and external benefits. Use the black point (plus symbol) to indicate the market equilibrium quantity. Next, use the purple point (diamond symbol) to indicate the socially optimal quantity. + Supply (Private Cost) Market Equilibrium Socially Optimal Level PRICE OF PUBLIC WIFI HOTSPOTS Social Value Demand (Private Value) QUANTITY OF PUBLIC WIFI HOTSPOTS